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With risk-off flows kicking into high gear today, I’m looking at an opportunity to hop in this bearish NZD/JPY trend.

Will we see a pullback to the Fib levels?

Before moving on, ICYMI, yesterday’s watchlist checked out EUR/USD’s short-term range support bounce. Be sure to check out if it’s still a valid play!

And now for the headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

Japanese household spending slumped by 2.3% vs. projected 3.2% drop

Australian NAB business confidence index down from 16 to 10 in April

UAE Energy Minister: Oil market is balanced, no need for OPEC+ to adjust

Chinese Vice Premier reaffirmed country’s zero-COVID policy

China recession fears and Fed tightening hopes weigh on Asian markets

Italian industrial production stays flat vs. projected 0.1% dip

Upcoming Potential Catalysts on the Forex Economic Calendar:

U.S. NFIB Small Business Index at 10:00 am GMT
FOMC member Williams’ speech at 11:40 am GMT
FOMC member Waller’s speech at 5:00 pm GMT
FOMC member Mester’s speech at 7:00 pm GMT

Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️

What to Watch: NZD/JPY

NZD/JPY 1-hour Forex Chart

NZD/JPY 1-hour Forex Chart

I’m seeing a lot of risk-off moves in the financial markets today, so I’m on the lookout for a chance to short higher-yielding currencies.

As it turns out, fears about another recession in China due to its tighter COVID-19 restrictions are sending traders towards the safe-havens.

This downtrend on NZD/JPY appears to be showing a pullback opportunity, as the 61.8% Fibonacci retracement level lines up with a falling trend line on the hourly chart.

This area of interest also happens to coincide with the 100 SMA dynamic inflection point, which is below the 200 SMA to confirm that the selloff could carry on.

A shallow pullback might even find enough sellers at the 38.2% Fib to take NZD/JPY back down to the swing low soon!

Stochastic is still pulling higher, though, so there might be room for a bigger correction before sellers take over.